Media captionKevin Rudd: "Too many innocent people have been lost at sea"

At least four people have died after a boat carrying Australia-bound asylum-seekers sank, amid ongoing debate over the new policy.

The boat sank off the Indonesian island of Java, the transit point for people-smugglers.

At least 157 people have been rescued. It is not clear how many are missing.

Meanwhile, Australia's immigration minister said he would investigate abuse claims at the country's offshore processing centre in Papua New Guinea.

Prime Minister Kevin Rudd announced a new asylum policy last week, ahead of polls expected to be announced soon.

Under the policy, asylum-seekers arriving by boat in Australia will be sent to Papua New Guinea (PNG) for processing, and those whose refugee claims are upheld will be settled in PNG, rather than Australia.

Australia has experienced a sharp increase in the number of asylum seekers arriving by boat in recent months. But critics have accused Australia of avoiding responsibility and passing on its problem to a developing nation.

Mr Rudd said that the sinking underlined the need for a policy shift, saying the government had to send "a very clear message to people-smugglers to stop sending people by boat to Australia".